SEC Approves Rules Establishing Dodd-Frank Whistleblower Program
On Wednesday, May 25, 2011, the Securities and Exchange Commission (the "SEC") adopted rules to create a whistleblower program that rewards individuals who provide the agency with tips that lead to successful enforcement actions. The SEC implemented the rules under Section 992 of the Dodd-Frank Act. (Read the SEC press release.)
Under the SEC's proposed rule, whistleblowers are eligible for an award if they voluntarily provide the SEC with original information that leads to the successful enforcement by the SEC of a federal court or administrative action in which the SEC obtains monetary sanctions totaling more than $1 million. The SEC’s new whistleblower rule will be effective 60 days after they are submitted to Congress or published in the Federal Register.
The controversial program has been criticized for a number of reasons, including for incentivizing external reporting rather than using internal reporting programs required under the Sarbanes-Oxley Act. (Read Fred Rivera's article regarding the inherent conflict between Dodd-Frank's whistleblower program and SOX the April issue of Complinet, originally published with Thomson Reuters-GRS; in ThomsonReuters http://accelus.thomsonreuters.com).
Read Perkins Coie Update: SEC's New Whistleblower Rules Redefine Reporting Landscape.
